A worker attaches a wiring harness to the chassis of a Model X SUV at the BMW plant in Greer, South Carolina on November 4, 2019.
Charles Mostoller | Reuters
DETROIT. According to S&P Global Mobility, the war in Ukraine is expected to reduce global passenger car production by millions until next year.
The automotive research firm, formerly known as IHS Markit, on Wednesday cut its forecast for global light vehicle production for 2022 and 2023 by 2.6 million units in both years, to 81.6 million units in 2022 and 88.5 million units in 2022. 2023.
The conflict has caused problems with logistics and supply chains, as well as shortages of spare parts for critical vehicle components. In particular, many car manufacturers are purchasing wiring harnesses, which are used in vehicles for power supply and communication between parts, from Ukraine. The problems exacerbate an already strained supply chain due to the coronavirus pandemic and the ongoing shortage of semiconductor chips.
European auto production is expected to experience the most disruption, according to S&P. The firm cut its forecast for Europe by 1.7 million units, including just under 1 million units due to lost demand in Russia and Ukraine. The remainder of the cuts are due to shortages of parts, including chips and wiring harnesses, caused by the war.
By comparison, S&P cut North American passenger car production by 480,000 units in 2022 and 549,000 units in 2023.
According to S&P, about 45% of wire harnesses produced in Ukraine are typically exported to Germany and Poland, which puts German automakers in a vulnerable position. Automakers such as Volkswagen and BMW were among the hardest hit after Russia’s invasion of Ukraine about three weeks ago.
Volkswagen CEO Herbert Diess said earlier this week that the war had cast doubt on the company’s 2022 outlook as the automaker struggled with parts issues. He said the company is shifting some of its production from Europe to North America and China in response to war-related supply chain disruptions.
On Wednesday, BMW lowered its automotive division’s 2022 profitability forecast from 8%-10% to 7%-9% due to the impact of the unfolding Ukrainian crisis.
BMW factories will return to full production next week after the luxury car maker halted or reduced output at some German plants following the invasion, the company’s chief technology officer Frank Weber said.
Weber said the company has been working with suppliers to duplicate, rather than relocate, wiring harness production to try and save jobs in the country.
“If you look at Ukraine, this wiring harness industry employs roughly 20,000 people,” Weber told reporters Wednesday during a remote roundtable. “We didn’t just want to clean up the work there.”
Overall, S&P on Wednesday said it had excluded nearly 25 million units of global light-duty vehicle production from its forecast through 2030.